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US sanctions against Iran will impact Asian shipping

Lawyers at Duane Morris LLP in Singapore say sanctions will indirectly apply to Asian entities, especially in the banking sector.

Asian businesses, including shipping-related companies, have made major investments in the Iranian economy including the oil & gas and shipping sectors. With US President Donald Trump deciding to reintroduce U.S. sanctions on Iran by ceasing the US’s participation in the Joint Comprehensive Plan of Action (JCPOA), Duane Morris lawyers caution that Asian businesses should proceed with extreme caution in their dealings with the country.

In an advisory note released today, Duane Morris cautioned that while, strictly speaking, US law, including sanctions law, applies to US persons and activities that take place in the United States, there are two practical exceptions to this involving the Iran sanctions that could have an impact to foreign businesses dealing with Iran.

The Comprehensive Iran Sanctions, Accountability and Divestment Act of 2010 (CISADA), prevents any foreign financial institution breaching certain US sanctions from opening or maintaining US correspondent accounts or US payable-through accounts with any US financial institutions.

“Laws like CISADA will directly affect foreign financial institutions (including Asian banks) which do not comply with certain US Iran sanctions, as those institutions may find themselves blacklisted and unable to use the U.S. financial system. This, in practice, has a knock-on effect on Asian businesses who deal with Iran. Because of the risk of being blacklisted, Asian banks will exercise caution when dealing with clients or potential clients with business in or with Iran, in case US sanctions are being violated. Such clients or potential clients will become high risk, and banks may, in certain cases, deem that risk too great and refuse to deal with such clients or potential clients.”

“Sanctions will indirectly apply to Asian (non-U.S.) entities that trade with or do business in Iran, because U.S. persons will be extremely cautious when dealing with them in case they unwittingly find themselves dealing with sanctioned assets.”

“Even if that risk is minimal, being able to show that a company’s business does not violate sanctions will make dealing with U.S. commercial partners and U.S. and non-U.S. financial institutions much easier.”

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US sanctions against Iran will impact Asian shipping

Lawyers at Duane Morris LLP in Singapore say sanctions will indirectly apply to Asian entities, especially in the banking sector.

Asian businesses, including shipping-related companies, have made major investments in the Iranian economy including the oil & gas and shipping sectors. With US President Donald Trump deciding to reintroduce U.S. sanctions on Iran by ceasing the US’s participation in the Joint Comprehensive Plan of Action (JCPOA), Duane Morris lawyers caution that Asian businesses should proceed with extreme caution in their dealings with the country.

In an advisory note released today, Duane Morris cautioned that while, strictly speaking, US law, including sanctions law, applies to US persons and activities that take place in the United States, there are two practical exceptions to this involving the Iran sanctions that could have an impact to foreign businesses dealing with Iran.

The Comprehensive Iran Sanctions, Accountability and Divestment Act of 2010 (CISADA), prevents any foreign financial institution breaching certain US sanctions from opening or maintaining US correspondent accounts or US payable-through accounts with any US financial institutions.

“Laws like CISADA will directly affect foreign financial institutions (including Asian banks) which do not comply with certain US Iran sanctions, as those institutions may find themselves blacklisted and unable to use the U.S. financial system. This, in practice, has a knock-on effect on Asian businesses who deal with Iran. Because of the risk of being blacklisted, Asian banks will exercise caution when dealing with clients or potential clients with business in or with Iran, in case US sanctions are being violated. Such clients or potential clients will become high risk, and banks may, in certain cases, deem that risk too great and refuse to deal with such clients or potential clients.”

“Sanctions will indirectly apply to Asian (non-U.S.) entities that trade with or do business in Iran, because U.S. persons will be extremely cautious when dealing with them in case they unwittingly find themselves dealing with sanctioned assets.”

“Even if that risk is minimal, being able to show that a company’s business does not violate sanctions will make dealing with U.S. commercial partners and U.S. and non-U.S. financial institutions much easier.”